Problems relating to Trade and Investment on Czech Republic

14. Taxation Systems
Issue	Issue details	Requests	Reference

(1) Frequently Changed and Strengthened Taxation System

- Changes are frequent in various regulations (procedures) in relation to taxation matters.

(2) The Issue on resolving Double Taxation under the Tax Treaty

- The Current Law dictates that the authorities of the both countries to use "the best efforts" for resolution and expulsion of double taxation between the two countries. In light of the fact that EU taxation authorities employ "the Mutual Agreement Procedure (MAP)", "the Exercise of Best Efforts" is considered insufficient.

- It is requested that under the OECD BEPS initiative, multi-national measures for avoidance of double taxation are established. These multi-national measures will obviate the need for renegotiation the tax treaty, enabling acceleration of the entire process.

- Various laws in each EU country and Japan

(3) Issues concerning Treatment of Royalty under Tax Treaty

- On payment of royalty for technical assistance fee from Czech to Japan, unfavourable tax treatment exists. Though deductible by 10%, it is insufficient.

- It is requested that GOG reduces the tax rate to 0%, the same as other member states (for example, U.K.) in order to secure competitive tax levy environment.

- Amend the Czech and Japan Double Tax Treaties to reduce the impact of local legislation

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